When Startups Meet Investors – A Practical Guide for SME Owners

A great business idea won’t bring you fortune on its own. Similarly, being talented and experienced doesn’t guarantee success. Also, having lots of connections won’t make you achieve your goals. However, when you possess all three features and a wealthy investor, you can expect something from your business effort. But here you’ll encounter another problem – convincing large business players that your concept can bring profits. If you stay with us for the rest of this text, you’ll learn more about preparing a startup for a successful collaboration with investors.

Empowering the brand

Although it might seem that a small business can hardly become a brand on its own, it’s a misconception. With or without an investor, your main business goal should be to get ahead of the curve and establish a big small brand, as the wise guys from The Guardian defined it. Translated to your everyday approach to work, it means that you need to focus on the quality of your products, the contentment of your workers and the overall climate within the business. When all these pieces are put together, your brand will speak for itself. An established small brand will have a better starting point when its owner(s) sit(s) down to negotiate with potential investors.

Making a market difference

When you realize that your business needs an additional financial injection, it’s vital to offer something that will make a difference. Nonetheless, you should forget about sheer marketing promotion without any real substance, but give your audience something truly valuable instead. For instance, if you make wooden toys, they should appeal to your customers in a different way than commercial plastic toys. Sell their originality and genuine design. Add some storytelling to each and every product you make. That way, you’ll generate more leads and provide your investor(s) with some innovational ideas.

Settling previous debts

Debts are one of the major reasons why SME owners look for investors in the first place. However, they shouldn’t be included in your agenda for attracting new investments. There are three main reasons why your debts should be settled before your potential collaborators see your business books. Firstly, having debts narrows down your room for maneuver. That way, the other party can more easily impose their conditions on you. Secondly, having debts is a sign of poor business planning, which might deter potential business associates. Finally, keep your financial records in order. Thanks to the Web, today you can find some affordable deals for that purpose. From hiring a tax accountant in Sydney to reaching out to freelance advisers in London or Hong Kong, you can find experts who will keep your finances as neat as possible. It’s more likely that investors will work with meticulous business owners with clean business reports.

Agreeing the terms of collaboration

No serious entrepreneur will like a spineless startup owner. When you don’t defend your strategies and ideas, it seems that you don’t believe in them and there’s nothing worse than a business owner without a clear vision. Because of that, you should exercise an assertive and self-confident attitude when meeting your investor. While it’s true that their assets will help your business grow, don’t underestimate the value of your ideas. Therefore, when you’re negotiating the terms of collaboration, come up with a bold offer that will show your zeal and enthusiasm about the entire project. Moreover, make sure everything you negotiate is put in written form.

Also, before you start the final round of your quest for investors, learn more about the legal details you should pay attention to. For instance, Forbes brings a legal guide on startups and investors. You can learn more about it here.

The business battle is merciless, which is why startup owners often lack funds for their original ideas. While joining forces with investors is often the only road that these entrepreneurs can take, they should respect their own business. When you manage to support your plans with practical arguments and proof, the business collaboration you establish that way will be beneficial for both your business and your new financier. Only an agreement that considers the interests of both parties will ensure a bright business perspective.

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Dan Radak is a VPS security and Hosting generaly specialist. Currently he is employed as a consultant in a couple of e-commerce companies. Lately he has been interested in studying related themes. You can follow him on Twitter.

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